Guyana Frontier Mining Corp. (Guyana Frontier) announces it that it has received notice from Mulgravian Ventures Corporation (Mulgravian) that Mulgravian has exercised its option (the Option) in respect of the Five Star property (Five Star), located in Guyana, South America. Under the terms of the option agreement (the Option Agreement) between Guyana Frontier and Mulgravian dated September 10, 2010, Mulgravian has earned its 51% interest in Guyana Frontier's rights to Five Star, with Guyana Frontier retaining a 49% interest, and a joint venture has commenced between the two parties. An inaugural joint venture meeting was held in early April 2012 to discuss and finalize programs and budgets for upcoming exploration at Five Star.
Five Star consists of 17 mining permits and 8 prospecting permits, which cover an area of approximately 25,065 acres (10,144 hectares) near the settlement of Matthew's Ridge, Guyana. Five Star is adjacent to Guyana Frontier's Whana and Black Banana properties, which together form a contiguous area of approximately 115,580 acres (47,775 hectares). Guyana Frontier acquired its 100 percent interest in Five Star from two separate underlying vendors, Case Development Company Ltd. and Marcel Andrew Waaldijk (collectively, the Underlying Vendors), with each Underlying Vendor currently maintaining a 3 percent net smelter returns royalty (NSR) on their respective permits. Each NSR is subject to buy-down provisions. Further details on the acquisitions of Five Star and the NSRs can be found in Guyana Frontier's news releases dated April 12, 2010, April 20, 2010, and April 21, 2011.
Mulgravian earned its 51% working interest in Five Star by incurring exploration expenditures and by making share purchases in Guyana Frontier, as follows:
making aggregate exploration expenditures and certain property acquisition payments to the Underlying Vendors totalling US$2,000,000;
purchasing an aggregate of 700,000 units (the Units) of Guyana Frontier by way of private placement (the Private Placement) for gross proceeds of CDN$210,000; and
exercising all of the common share purchase warrants (the Warrants) comprising the Units for further gross proceeds to Guyana Frontier of CDN$420,000.
The Private Placement closed on December 10, 2009, with the first tranche of Warrants being exercised on November 18, 2010, and the second tranche being exercised on November 18, 2011. Further details of the Private Placement, the terms of the Units and the Warrants, and the exercise of certain Warrants can be found in Guyana Frontier's news releases of November 4, 2009, January 8, 2010, November 23, 2010, and November 18, 2011.
On March 10, 2011, Mulgravian gave notice to Guyana Frontier that pursuant to the terms of the Option Agreement, it wished to assume direct operatorship of the Five Star property. Prior to such date, Mulgravian had retained Guyana Frontier to manage and operate the exploration programs on the Five Star property.
On April 21, 2011, Guyana Frontier announced that it had exercised its option to acquire a 100 percent interest in the Five Star-Case property.
On May 10, 2011, Guyana Frontier filed a technical report on SEDAR, compliant with the standards of National Instrument 43-101, in respect of Five Star.
About Guyana Frontier
Guyana Frontier is a public mineral exploration company listed on the TSX Venture Exchange (TSX-V: GYG), and is focused on the exploration, discovery and development of precious metals deposits located within Guyana, South America. Guyana Frontier began acquiring interests in Guyanese exploration properties in 2007, and now holds various rights to obtain working interests in approximately 342,000 acres (138,400 hectares) of prospective lands. Guyana Frontier's goal is to develop a significant gold resource at the Marudi Mountain Gold Project in southern Guyana, and to explore its other Guyanese projects using funding from exploration partners.
For further information about Guyana Frontier, please visit our website at www.guyanafrontier.com or contact Warren Stanyer, President and CEO, at (604) 558-0077 .
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